Asked about influence of the US-China trade war on their business performance, Vietnamese enterprises said they can see opportunities, but find it difficult to grab them.
On the morning of August 24, a group of steel manufacturers in HCMC organized a meeting to discuss the opportunities and challenges for the steel industry in 2019.
Contrary to all predictions, enterprises are pessimistic about the future, saying that the US-China trade war can bring some opportunities to boost exports, but the challenges are even bigger because of the decrease in demand.
“If the trade war is prolonged, the impactsm on enterprises’ operation would be more serious,” said Le Cong Khuong, director of Khuong Mai Steel.
As for the footwear industry, according to deputy chair of Lefaso Diep Thanh Kiet, the fact that the US President Donald Trump’s has asked US companies to leave China would have both positive and negative impacts on Vietnam.
|As for the footwear industry, according to deputy chair of Lefaso Diep Thanh Kiet, the fact that the US President Donald Trump’s has asked US companies to leave China would have both positive and negative impacts on Vietnam.|
Vietnam’s footwear industry has the production capacity of 1 billion pairs and it needs 10 years to double the production capacity. Meanwhile, China exports 1.7 billion pairs to the US each year. If just half of the amount is made in Vietnam, the Vietnamese footwear industry will suffer.
“Vietnam can export 460 million pairs to the US a year. If the export turnover soars suddenly, Vietnam is likely to bear anti-dumping duty to be imposed by the US. So, the risk is very high,” Kiet said.
Not only the footwear industry, but textile and garment, seafood and electronics manufacturing would also suffer because Chinese enterprises in the industries are likely to relocate their production to Vietnam to avoid the US taxation. They would compete with domestic ones in Vietnam for workers and land access.
The predictions that Vietnam would get benefits from the US-China trade war have not come true. Vu Tien Loc, chair of VCCI, noted that Vietnam has become involved in misfortune because of the trade war with export growth slowing down and FDI decreasing.
The export growth rate in the first half of 2019 was just nearly half of that of the same period last year. Regarding FDI, the additional investment capital and capital used to buy into Vietnamese companies was $18.4 billion, down by 9.2 percent.
Analysts have warned that Chinese goods are competing directly with Vietnamese in the home and the world markets, thus putting pressure on Vietnamese enterprises. To deal with this, the state needs to strengthen control over imports to prevent origin fraud.
Tran Dinh Thien, member of the National Advisory Council in Finance and Monetary Policies, also said it is necessary to anticipate long-term negative impact on the economy.
“The trade war causes negative impacts on investment and monetary policies of many countries, including Vietnam,” Thien said.
The Vietnamese footwear market may face problems if the US imposes a tariff of 25 percent on Chinese products in the current trade war.
Many Vietnamese enterprises are keeping a close eye on the escalating US-China trade war and have said the challenges from it outnumber the opportunities for them.